THE BACK PAGE: While the Sideshow Plays On
October 1, 2010
“America is the most free place in the country,” opined one of the shiny new Tea Party candidates recently. That’s the group of billionaire-funded poli-tainers whose real job, should they ever achieve actual power, will be to stand in the way of any government supervisory role in the economy and make their libertarian underwriters happy. After that, market magic will take over and the invisible hand will guide the deserving among us to everlasting wealth. Or something like that.
Next month’s mid-term elections turn on the old “government is the problem” game that has very deep roots in America and is, like most blanket statements related to complex matters, occasionally true but always terribly easy to poke holes in.
One man’s rock solid truth is another man’s pet peeve. And thinking people can disagree. But at some point a failure to resolve fundamental world views leads to stagnation. When significant portions of a great nation become convinced that their president is or could be an alien or that his predecessor should be on trial for war crimes, the consensus-oriented pragmatists end up in the shadows.
Still, every now and then, real truth can be glimpsed. Clarity came into view last month when senators from both parties displayed rare bipartisan agreement on one basic point: When it comes to economic development, China continues to kick America’s butt.
The latest painful example for the Americans comes on the clean-energy front, which was/is supposed to be an industry that helps lead the country out of a chronically high unemployment situation. Except the ship has sailed and China, using all the might that it can muster, is already way ahead. The combination of activist Chinese government practices such as land transfers to energy corporations at bargain-basement prices, low-cost loans with reimbursement for interest, export restrictions on the raw materials that are needed to produce solar panels and wind turbines (these resources, known as “rare earths,” are something that China possesses in abundance) and the country’s natural human capital cost advantages (i.e., engineers making around $3,000 a year) is beginning to overwhelm American and European clean-energy producers.
Outside of using its own educated people, all the steps outlined above are violations of World Trade Organization rules for exporters. The rules are designed to create a level playing field on the cost side, but ask China if it cares. Any attempt to impose tariffs or other penalties is sure to be met with a series of painful counterattacks by mighty China and, so far, the U.S. government has blinked, refusing even to call China’s steps to keep the value of its currency artificially low “manipulation”.
“There is no question that the economic and trade policies of China represent clear roadblocks to our recovery,” said Sen. Chris Dodd (D-Conn.) at a Senate Banking Committee hearing last month. “I’ve listened to every administration, Democrats and Republican, from Ronald Reagan to the current administration, say virtually the same thing, producing the same results. China does basically whatever it wants, while we grow weaker and they grow stronger.” The tone of his comments was basically echoed by Richard Shelby (R-Ala.), the committee’s ranking Republican.
With China ascendant and America flattening out for nobody knows how long, it’s no surprise to see leading gaming companies positioning themselves toward one and away from the other. Last month, Las Vegas Sands Chairman Sheldon Adelson made it known in an interview with Dow Jones News Service that the company is considering dropping “Las Vegas” from its name. The implication is obvious.
The renamed company would be Sands International or Sands Resorts International, taking a page from MGM (now MGM Resorts International) up the street. MGM, for its part, last month elevated Gamal Aziz to the position of president and CEO of MGM Hospitality, where a primary focus will be the company’s growing resort business in Asia.
The Macau market continues to exceed expectations, which were already high to begin with. In the first eight months of the year, the region’s top casino, Wynn Macau (including Encore) posted $2.18 billion in gross gaming revenue. The overall market grew 63 percent, owing plenty to easy 2009 comps, but still. … Total revenues in August increased 40 percent, a mark which forecasters believed would be equaled in September. Those figures will decrease toward the end of the year as 2009 comparables rise, but forecast revenue growth in Macau this year ranges from a low government number of 30 percent to analyst consensus figures of around 50 percent.
About the only thing that could get in the way here is politics.